Bangladesh: wages to rise by 77 percent

After months of protests by garment workers, the wage board

in Bangladesh has finally decided to propose a rise of the garment workers’ monthly minimum wage from currently 3,000 takas (38 US dollars) to 5,300 takas (68 US dollars).

As the world’s second largest garment exporter after China, Bangladesh’s major competitive edge is its low wages. However, cutting margins so thin that little is left for safety measures has backfired for Bangladesh that suffered a string of factory accidents recently, which cost the lives of hundreds of garment workers. In addition, the current salary is not enough to feed the workers, let alone their families, resulting in malnutrition, poor health and frequent absences and poor work performance.

While the unions, having suggested a monthly wage of 8,000 takas (100 US dollars), feel the proposed new minimum wage is too low, factory owners complained that it is too high. The current suggestion represents a compromise: "The board proposed this amount considering the present reality both from the point of owners and workers," confirmed AK Roy, chairman of the wage board according to Reuters.

Fearing for Bangladesh’s competitive edge, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) was quick to oppose the proposal. "We will appeal to the government to consider our ability, and it should not take any decision out of emotion or political benefit," said BGMEA representative Arshad Jamal Dipu.

The workers raised the valid point that despite the 77 percent increase, Bangladesh’s minimum wage would still remain one of the world’s lowest. "We will urge the owners to implement it without any opposition, otherwise there will be a deadlock in the sector," said workers' representative Sirajul Islam Rony.

Before anything will change, the wage increase still needs to be approved by Bangladesh’s Ministry of Labour and Employment. During the last wage negotiations in 2010, prime minister Sheikh Hasina intervened and spoke in favor of the workers, resulting in the current minimum wage, which was slightly above the wage board’s recommendation. Many expect the prime minister to have the last word this time around as well.

Should the decision be unfavorable for Bangladesh’s four million garment workers, lengthy strikes may follow like the six-day one in September that affected 20 percent of all factories and cost them dearly in terms of time and revenue.

International buyers, asked to absorb the potential 77 percent wage increase by paying higher prices for garments ordered, have so far refused and asked the factories instead to cover their own expenses by finding ways to save on operations. That this will come again at the cost of worker health and safety is not hard to imagine.

Rather than pass the buck, it may be time to ponder the worth of the clothes we wear. After all, in no other industry has the consumer price index fallen over the last 20 years; in fact, it has increased by 63.5 percent. In comparison, the price for clothing has fallen by 3.3 percent, which corresponds to 41 percent taking the real inflation-adjusted cost into account. That means, a T-shirt that cost 10 US dollars in 1993 would cost only 5.90 US dollars today! No wonder that this has led to a throwaway culture of clothes where buying new is actually cheaper than washing, mending or recycling. This mind boggling calculation leaves consumers wondering if we should really value our garments that cost a lot of human effort and resources to make so little.